FYI,

the SRU for bug 669481 has now been accepted and the package built into
-proposed.

I tested the new package with the process described in comment #8 and it
does indeed fix this issue.

I suppose that now we need to wait for it to appear in -updates.

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https://bugs.launchpad.net/bugs/1035279

Title:
  instance hangs at grub prompt after reboot followed by euca-reboot-
  instances

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